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Chapter 2
however, the company began to develop models of how certain industries’ business processes
should be managed. Thus, SAP ERP’s design incorporates best practices for a wide variety of
34 processes. A best practice is the best, most efficient way of handling a certain business
process. If a company’s business practices do not follow one of the best practices incorporated
in the SAP ERP design, then the business must redesign its practices so it can use the
software. Although some customization is possible during implementation, many companies
find they must still change some of the ways they work to fit the software.

ERP FOR MIDSIZED AND SMALLER COMPANIES
By 1998, most of the Fortune 500 companies had already installed ERP systems, so ERP
vendors refocused their marketing efforts on midsized companies (those with fewer than
1,000 employees). Small and midsized companies represented a ripe, profitable market.
For example, in 2001, small and midsized companies in the United States increased their
IT expenditure by more than 4 percent over the previous year. To appeal to this new
market, SAP developed SAP Business All-in-One, a single package containing specific,
preconfigured bundles of SAP ERP tailored for particular industries, such as automotive,
banking, chemicals, and oil and gas. Because it is tailored to specific industries, SAP
Business All-in-One can be installed more quickly than the standard ERP product.
To address the needs of smaller companies, such as those with less than 500
employees, SAP purchased the ERP system of Israeli-based TopManage Financial Systems in
2002, and renamed this package SAP Business One. The capabilities of SAP Business One
have increased over the years through both internal development at SAP and the
acquisition of other software companies such as iLytix Systems AS, which added new
reporting capabilities to SAP Business One. In July 2011, SAP announced that SAP Business
One would be available in a new subscription-based, hosted offering through SAP partners.
In addition, SAP has developed its BusinessByDesign product, which is an ERP
product hosted by SAP and accessed through a Web browser. It is an example of the
software-as-a-service (SaaS) approach that eliminates the need for a company to buy and
maintain the software and hardware to run an ERP application. SaaS does not eliminate
the need to configure the software to manage a company’s processes or the need to train
users of the system, but it does reduce the need for IT support staff to operate the ERP
system. SaaS is discussed more fully in Chapter 8.
SAP and Oracle have significant competition for small-business customers from a
number of smaller ERP software companies such as Sage Business Solutions, Exact, Infor,
and Epicor. In 2000, software giant Microsoft acquired Great Plains, a provider of ERP
software, as an entry into the small-business ERP market. Microsoft currently has five ERP
products offered under the Microsoft Dynamics label.

Responses of the Software to the Changing Market
In the mid-1990s, many companies complained about the difficulty of implementing the
SAP R/3 system. SAP faced a canceled implementation by Dell Computers, a lengthy
implementation at Owens Corning, and a lawsuit by the now-defunct FoxMeyer drug
company. Cadbury experienced a well-publicized surplus of chocolate bars at the end of
2005, due, in part, to a troubled SAP ERP implementation. In response to these and other
implementation challenges, SAP developed the Accelerated SAP (ASAP) implementation

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